The board of Goldman Sachs Group Inc has said that it will be keeping the 2018 bonus of top executives until the 1MDB investigations are over.
The fifth-largest bank in the US, Goldman Sachs said, on Friday, that their decision to withhold the bonuses of top executives is as a result of the ongoing criminal investigation of a Malaysian investment fund called 1MDB.
Goldman is currently being probed by the U.S. Department of Justice and the Malaysian authorities for serving as an underwriter and arranger of three bond deals for 1Malaysia Development Berhad. The sales raised a total of $6.5 billion.
The Malaysian government alleges that assets were plundered from the fund. According to the U.S. Justice Department, about $4.5 billion was embezzled by top officials of the 1MDB fund and their associates between 2009 and 2014 and these funds include those that Goldman Sachs raised for the investment fund. Goldman Sachs has, however, denied any involvement in the wrongdoing, saying that they are victims of corrupt Malaysian officials.
Following the event, the board of Goldman Sachs approved a new forfeiture provision that could withhold or withdraw payments from top executives. The board says that the executives will be paid their bonus after investigations into the 1MDB scandal have been concluded.
In a regulatory filing on Friday, the board said that it can reduce the pay packages of top executives if it discovers that the ongoing 1MDB investigations have impacted their year-end compensation decisions. The forfeiture can apply to any of the 2018 top five executive officers of the firm.
Goldman Sachs said it paid its current Chief Executive, David Solomon, total compensation of $23 million in 2018, including a salary of $1.9 million and a bonus of $21 million.
Blankfein who assumed the role of CEO in 2006 but stepped down in October 2018 received annual compensation of $20.5 million last year including a salary of $2 million and a bonus of $18.5.